The Government of India is looking to divest at least 51% stake in IDBI Bank, Bloomberg reported citing unnamed sources familiar with the matter.
Officials in the government and the Life Insurance Corporation of India (LIC) are holding discussions on how much of their shareholding they plan to dilute, the sources said.
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Notably, the government and the life insurer collectively hold more than 94% stake in IDBI Bank.
They are expected to retain a stake in the bank after divesture, the sources said adding that a panel of ministers will take the final call on how the deal will be structured.
Both the parties could gauge investor interest as early as the end of September, one of the sources said.
In the last 12 months, IDBI Bank shares have soared 6.3% giving it a market value of about INR424.7bn ($5.3bn).
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By GlobalDataRepresentatives of the Indian finance ministry and the bank declined to comment on the development and officials at LIC did not immediately respond.
The plan is to sell at least some of the government and LIC’s stake in the bank and transfer the management control.
According to Bloomberg News, the Reserve Bank of India will permit investors to buy over 40% stake in IDBI Bank.
Last week, a report by Economic Times said that the authorities are in talks with buyout funds and financial institutions such as the Carlyle Group, TPG Capital and Fairfax Holdings for the sale of the stake.
The global private equity investors could partner with local investors for bidding entities, or they could also partner with other investors to form a consortium.
